Information in: Español - Français - Deutsch - Português - Russian - Japanese - Svenska - Italiano - Suomi

FT (April 5, 2005):MPs hit at anti-bribery rule weakening

MPs hit at anti-bribery rule weakening
By Jean Eaglesham, Political Correspondent
Published: April 5 2005 03:00 | Last updated: April 5 2005 03:00

A Labour-dominated inquiry has attacked the government for ceding to industry pressure by agreeing to an "unacceptable" weakening of anti-bribery rules.

Ministers were yesterday criticised by the Commons trade and industry committee for sanctioning changes to the anti-corruption rules imposed by the Export Credits Guarantee Department, the main export finance agency.The MPs questioned assurances that the December changes to the rules would not damage the fight against corruption. "We are not all convinced these changes will not seriously weaken the ECGD's ability to contribute to the government's policies against bribery," said Martin O'Neill, the committee's Labour chairman.The committee said it was "unacceptable" that the revised rules meant companies getting ECGD backing no longer needed to check that their business partners were not using taxpayers' money to pay bribes.The MPs questioned the assertion by the CBI employers' group that the original rules introduced last May were "unworkable". The report noted the ECGD supplied £55m of cover for seven companies under the May rules before the changes came into force in December.During this interim period, the agency also agreed to allow £900m of cover under the old rules for the three aerospace companies - Airbus, BAE Systems and Rolls Royce - which led the business opposition to the changes. Deals for BAE accounted for £750m of these "interim arrangements", according to a recent parliamentary answer.The MPs said they could not understand why these companies could not accept support under the new rules, since other companies could.The report is a further embarrassment for Patricia Hewitt, trade and industry secretary, who sanctioned the secret negotiations with industry, which led to the rules being weakened. Ms Hewitt has already been forced to agree in January to allow an open consultation on the rule changes.This U-turn came after the Corner House, an anti-corruption lobby group, threatened a legal challenge that could have disrupted the export financing system.Susan Hawley, a consultant with the Corner House, welcomed the committee report. "Any common sense reading of the documents shows the ECGD's procedures were tampered with to the point of becoming virtually ineffectual at preventing bribery."

The ECGD said it noted the MPs' views, which would be taken into account in the consultation on the rule changes.